Federal workers must pay back jobless benefits

Oct. 27, 2013 - 04:32PM
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The federal government shutdown cost taxpayers billions of dollars but at least a tiny fraction will be recouped: Federal employees will get paid just once — not twice — for not working.

All federal employees who collected unemployment insurance during the 16-day shutdown will have to return the payments because the workers are also receiving back pay, the Labor Department said late last week.

The agency earlier this month said it expected to issue guidance that likely would result in some states allowing federal employees to keep both the jobless benefits and the retroactive pay, depending on individual state laws.

In Oregon, for instance, a law permits employees to keep the benefits even if they receive back pay, as long as they did not perform any services during their furloughs. About 730 federal workers in Oregon made an initial claim for unemployment insurance during the shutdown and received about $390,000 in benefits, the state Employment Department says. The state paid the benefits but said it expected to be reimbursed by the federal government.

But in guidance to states late last week, the Labor Department said that, because they were in “pay status,” all furloughed employees “were not ‘unemployed’ and are thus ineligible for unemployment benefits.”

The Oregon Employment Department said in a news release that it now will tell federal employees the benefits “are an overpayment and must be repaid.” It added that the Labor Department changed the directive it had issued earlier this month which said that federal employees were eligible for unemployment insurance.

Nationally, about 70,000 of the 400,000 federal employees furloughed during the shutdown applied for jobless benefits, but a much smaller number took the steps required to receive them, federal and state labor officials say. They generally collected the payments for just one week because they worked during parts of the shutdown’s first and third weeks.

Even before the Labor Department’s recent guidance, the agency had said it was clear that federal employees in most states would have to repay the benefits.